Feature Articles: Financial Information & Tips
What is a living wage?: A Missouri Self-Sufficiency Standard
Brenda Procter, M.S., State Specialist & Instructor Personal Financial Planning, University of Missouri Extension
Public assistance policy discussions often include
the term self-sufficiency. Different meanings are
associated with the term, depending upon who uses it.
One might argue that none of us is truly self-sufficient
in that we each rely on not only our own resources, but
also on public services, benefits from fiscal and
monetary policies, and the contributions of friends,
family members and others to our economic well-being.
A study done for the
Missouri Women’s Council by the
Department of
Economic Development (DED) Research and Planning
unit defined self-sufficiency this way: “…the amount of
income needed for a family to meet its basic needs
without using public assistance.” The study,
The Missouri Self-Sufficiency Standard: Necessary Wages
for Essential Needs, provides self-sufficiency
standards for every county in Missouri. It uses costs of
basic survival needs (like housing and food) and takes
into account family size, composition and location.
The study reports county-level self-sufficiency wages
for 30 different family sizes and compositions. This
approach allows more variation than the official poverty
measure. It assumes that all adults in the household
work, recognizes that childcare costs vary with age of
child, and incorporates regional cost differences not
addressed by the
official measure of poverty.
There is a large variance across counties in the wage
level needed to make it without public assistance.
According to the study, for example, a family with one
adult, a preschooler and a school-age child living in
Milan in rural Sullivan County would need $11.11 in
hourly wages just to get by without public assistance
(still little more than half the average U.S. wage of
$20.0l an hour).
In Independence in Jackson County, that same family would need $14.32 to meet basic needs without public assistance. In no county was the minimum wage of $5.15 per hour deemed sufficient to support a single adult, much less a family.
In 1999, Becca Newman, MU consumer and family
economics master’s candidate, conducted a similar study.
A Basic Need Budget for Rural Missouri Single Mothers:
Estimation and Comparison with Poverty Measures
focused specifically on rural counties. Based on a
sample of eight counties in different regions of the
State, she found that a single mother with two children,
ages 4 and 6, would need from $9.72 to $11.74 per hour
in rural Missouri to meet basic needs.
Deanna L. Sharpe, MU associate consumer and family
economics professor, was Newman’s thesis adviser.
According to Sharpe, “Not all researchers agree on the
specific items to include in a ‘basic need’ basket. For
instance, if public transportation is available, some
would say an automobile is not a basic need. Others
might say entertainment is not a basic need. It could be
argued that, by restricting focus to those times needed
to sustain life, we overlook or undervalue expenditures
for things like education, which can improve quality of
life.” Sharpe says a “basic need” budget is exactly that
– a budget to cover only those expenditures considered
most essential.
Both studies similarly conclude that what it really takes for a one-parent family with two children to make ends meet is substantially more than either the $7.03 per hour official poverty threshold or the $5.15 per hour minimum wage. The debate over how best to measure poverty continues to unfold.
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Last update: Saturday, March 29, 2008
